Is Workforce Turnover Really That Bad?

Few metrics are as widely discussed as turnover rates when we look at the HR industry as a whole. Turnover is often portrayed as the ultimate measure of HR success, with the prevailing wisdom dictating that lower rates are always better. But at BrightMatter HR, we’re here to challenge the status quo. We believe that turnover, while undoubtedly challenging, might not be the villain it’s made out to be. Let’s explore this controversial topic and discuss the top five reasons why turnover might not be as bad as it seems. Hopefully we can change at least a few minds (or at least make you stop and think for a moment).

One of the most critical points to consider is that not all turnover is created equal. There’s a vast difference between voluntary and involuntary turnover. While voluntary turnover can be a sign of employees seeking new challenges and opportunities, involuntary turnover might indicate deeper issues within the organization. The important metric to focus on is regrettable turnover, which happens when your top performers leave your organization for better opportunities, ultimately resulting in negative business impacts. By understanding the nuances, HR professionals can develop targeted strategies to address specific challenges, rather than simply aiming for blanket low turnover rates.

2. We Shouldn’t Retain All Employees

Yes, you read that right. Not all employees should stay with your team long-term. Holding onto toxic employees, weak performers, or ineffective managers who aren’t contributing positively to the team can be detrimental to your organization. By being overly tolerant and afraid of necessary terminations, you risk harming team morale, productivity, and overall company culture. The bottom line is that some amount of turnover is desirable if it leads to positive changes – it makes room for new talent and additional insights.

3. No Turnover = No Growth

In today’s dynamic job market, a stagnant workforce can hinder your organization’s growth potential. New ideas, fresh perspectives, and diverse skill sets often come from external sources. Embracing a certain level of turnover allows you to inject innovation and creativity into your company, fostering an environment where employees are encouraged to learn and grow. Turnover can naturally transpire when an organization grows and changes its strategy or culture over time. These positive changes may reshape your workforce to meet your updated needs, which in the end, may be a positive form of turnover that isn’t all that bad.

Sure, low turnover rates might indicate content employees, but they could also suggest that your workforce lacks the skills and experience desirable in the job market. Of course you don’t want your best and brightest talent to be poached by others, but if you’re seeing a recurring low turnover rate year after year, it may be that your workforce isn’t in high demand elsewhere. A weak employer brand can make it challenging to attract top talent, leaving your organization with a workforce that might be complacent but not necessarily competitive. It’s important to strive for a team that remains attractive in the job market – update their skills, focus on career growth and offer retraining when and where it’s needed.

5. Limited Internal Opportunities

If your organization experiences very low turnover, it might signal a lack of internal mobility and growth opportunities. Ambitious employees seek organizations where they can achieve advancement within the company, learn new skills, and take on challenging projects. Without turnover, these opportunities might be limited, leading top performers to look elsewhere for career advancement. HR professionals should actively work on creating pathways for internal growth to keep their valuable employees motivated and engaged.

In the current job market, characterized by rapid changes and evolving trends, it’s crucial for HR to adopt a nuanced approach to turnover. By recognizing that not all turnover is detrimental and that retaining every employee isn’t always in the organization’s best interest, companies can strike a balance that promotes growth, innovation, and a healthy work environment.

At BrightMatter, we understand the complexities of turnover and its impact on organizations. We also use real metrics to illustrate what kind of turnover has a positive impact and which kind hinders success. By embracing the right kind of turnover and addressing underlying issues, organizations can pave the way for a brighter, more productive future.